Traders at Viet Dragon Securities' office. Photo tinnhanhchungkhoan.vn

HÀ NỘI — Even though the stock market is expected to continue rising, securities firms still warned of some corrections in the short-term due to profit-taking pressure.

With the market inching higher for four straight months, Mirae Asset Securities (Vietnam) is optimistic about the country's stock market outlook, the securities firms said in its recent report. 

The market benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) had jumped 18.52 per cent in the first five months. The index continuously hit new records in May despites rising worries over the fourth outbreak of COVID-19. 

In its basic scenario, Mirae Asset maintained its expectation of this year's earnings per share (EPS) growth at 28 per cent, lower than the market's positive level of 30 per cent. With the strong rally, bullish sentiment and rising liquidity, the company expected that the VN-Index will break over 1,500 points, the most positive scenario, this year.

The market driving forces include the optimism of investors in containing the pandemic, stimulus packages, economic growth and business incomes that are not heavily affected by COVID-19, Mirae Asset added. 

However, the securities firm sees some corrections in the short-term in June due to profit-taking pressure. 

Similarly, Viet Dragon Securities Corporation said that the country's stock market will keep its rally but face some fluctuations this month. 

The biggest support is the participation of individual investors, the company added. 

Meanwhile, it also warned about the overloading issues on HoSE as the problems occurred since the beginning of June. And the rising COVID-19 cases might have more negative effects on business results.

"The profit growth in 2021, which may be lower-than-expected regarding the ongoing pandemic and social distancing orders, can be a negative factor for the market in July or the third quarter," Viet Dragon said. 

It also expected that the VN-Index will move in a range of 1,303 - 1,421 points. 

On the other hand, according to Yuanta Securities Vietnam One Member Limited Company, the VN-Index's price to earning ration (P/E) in the last four quarters is reaching the firm's target of 18x, meaning the market is gradually entering the more expensive period. 

It also said that the VN-Index might start to correct at the closest supportive territory of 1,283 - 1,300 points.

Yuanta assessed that there is not much room for bank stocks and steel makers's stocks to grow in the short and mid-term. Therefore, it recommended investors consider continuing to hold and limit long positions, or maybe consider selling a part of these stocks.  

On Wednesday, the VN-Index rose nearly 1 per cent to 1,332.9 points after falling for two straight sessions. VNS